Sunday, August 26, 2012

Bernanke to Economists: More Philosophy, Please

On Monday, Ben Bernanke wasn’t talking like a scientist. He was talking like a philosopher. “The ultimate purpose of economics, of course, is to understand and promote the enhancement of well-being,” he said. To a roomful of economists, he suggested that the measurements they were using, like gross domestic product and personal consumption expenditures, were inadequate to that understanding. “Aggregate statistics can sometimes mask important information,” he said. Translation: People are unhappy, and we don’t know exactly why. “We should see better and more direct measurements of economic well being,” he said, “the ultimate objective of our policy decision.” Translation: I know it’s hard to measure happiness. Start doing it, anyway.